Bottom line: The standard for awarding attorney fees was lowered back in 2014 by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc. (2014). (Click here for the Highmark case). Before 2014, obtaining an award of attorney fees was fairly difficult, even in egregious situations. Now, under the lowered standard, the tide appears to have shifted. The Federal Circuit is now looking for an explanation of why the district court would not grant attorney fees despite strong evidence of the losing party’s litigation egregious misconduct.
In Oplus Technologies, LTD v. Vizio, Inc. (Fed. Cir. 2015), the district court had denied the prevailing party attorney fees under 35 USC §285, which states that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” The district court denied the award of attorney fees since both sides had engaged in delay and avoidance tactics to some degree even though the losing party’s misconduct was quite severe, as agreed to by the losing party’s attorney.
Under the old (higher) standard, an award attorney fees was only made based on clear and convincing evidence. The denial of an award of attorney fees was usually not overturned by the Federal Circuit, since “clear and convincing evidence” is such a high standard. The prevailing party would have had to be impeccable in every single aspect of its litigation conduct, whereas the losing party had to be villain.
The lowered standard now considers whether the district court abused its discretion in not awarding attorney fees. The Federal Circuit indicated that some degree of litigation misconduct on the part of both parties was allowed without triggering attorney fees. However, in this case, the district court was able to articulate the egregious misconduct of the losing party and not that of the prevailing party. For example, the losing party had a litany of misconduct such as:
- Constantly shifting litigation positions, expert positions, and infringement contentions
- Contradictory and unreasonable motion to compel for information and things that it was not entitled to or never requested;
- Failure to address various method steps of the claimed invention.
Hence, the Federal Circuit vacated the denial of attorney fees.
This case illustrates a significant shift in the other direction for awarding attorney fees to a prevailing party. This decision seems to suggest that attorney fees can be awarded when the prevailing party has run a fairly clean case while the losing party pulled every litigation trick out of the hat. There may be other imbalances of litigation misconduct between the parties that might trigger an award of attorney fees for the prevailing party, but that will have to be decided by litigation in the future.
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